Automotive

Lease coming to an end - what to do?

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[OP]
Jr. Member
Nov 6, 2006
177 posts
68 upvotes

Lease coming to an end - what to do?

Hey all,

Our lease is coming to an end within 5-ish months and we're kind of torn on what to do. Here's our current situation:
  • Car is 2018 Golf GTI Autobahn with DSG automatic
  • 80,000 km allowance, currently has 59,000 km
  • Put down $10k to lower monthly payments so we could purchase the house we're in now (advice from our advisor)
  • Paid $1,000 for VW protection, which covers all damages up to $10,000 (we have a golden retriever)
  • Residual is $19,800
We're not interested in keep the car. Since we never planned to buy it out, we didn't both doing rust proofing.
I'm hearing differing opinions about what to do:
  1. Buy out the car from dealer and sell private because of demand for GTI
  2. Trade the car in for next car if not getting another VW
  3. Sell the car back to the dealer as it's apparently worth more now???
Wife and I would love to get another GTI or R, as we are happy with ride, reliability and looks of the car, but open to other makes/models as well. Ideally would like to lease again in the event the car is a lemon or we don't end up enjoying it.

Some other makes/models besides the GTI we were looking at include:
  • Kia Soul (Electric or gas)
  • Hyundai Ionic/Kona (electric OR gas)
  • Mazda 3
  • WRX
  • Any others we should look at?
The catch is that we're somewhat limited to the size (length) of the MK7 GTI, so that the car can fit in our parking pad.

Thanks for any suggestions/tips
24 replies
Sr. Member
Feb 10, 2008
670 posts
532 upvotes
The first 3 cars in your list are totally different type of vehicle than a GTi or Golf R. You will be so bored and hate driving those 3 if you enjoy the drive and feel of your GTi.

I would recommend you check out the S3, and A35 if you want something kind of similar to your GTi in terms of "fun" to drive.

The easiest way is to bring your current car to the dealer and get a quote on how much TIV they are offering you for it and compare that to your buyout price/residual. If it is higher then theres your answer.
Deal Fanatic
Mar 21, 2010
6591 posts
3764 upvotes
Toronto
Just curious, if you like the ride, reliability and looks of the car, and want to get another one or something like it - why did you decide to rule out keeping it?
Deal Fanatic
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Jan 16, 2011
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Keeping it seems to make the most sense since you enjoy the vehicle and won't find another for the same price...
Sr. Member
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Jul 29, 2019
838 posts
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Given you put down a large downpayment on a lease, you should probably keep the car particularly when the size and driving are to your taste.

Now saying that, if you prefer the next-gen Golf GTI or R then go for it. I know people who just like the latest and greatest. Given the current climate, you definitely can get a good trade-in value for your car from the dealer. Plus, your total km driven is lower than what you paid for so you may get something back that can go to your next VW purchase as well. Plus Plus, they may be willing to waive the remaining left of your lease but all depends on what you can get from your dealer. I think you definitely should explore this route before making a final decision to buyout or get a new one.
[OP]
Jr. Member
Nov 6, 2006
177 posts
68 upvotes
Tokic_o wrote: The first 3 cars in your list are totally different type of vehicle than a GTi or Golf R. You will be so bored and hate driving those 3 if you enjoy the drive and feel of your GTi.

I would recommend you check out the S3, and A35 if you want something kind of similar to your GTi in terms of "fun" to drive.

The easiest way is to bring your current car to the dealer and get a quote on how much TIV they are offering you for it and compare that to your buyout price/residual. If it is higher then theres your answer.
This is the first time we've leased a car...I didn't realize you could get the car valued upon its return.

I failed to mention in my initial post that we don't drive much anymore since moving to our new home. Wife and I are both within 4km drive to the office, so we just take the streetcar now.

I thought perhaps an EV version of one of those cars would make more sense vs. gasoline, but agree that even the WRX is somewhat boring (imo).

I'll take a look at the A35, though it looks to be over our budget.
Manatus wrote: Just curious, if you like the ride, reliability and looks of the car, and want to get another one or something like it - why did you decide to rule out keeping it?
Mostly because of maintenance costs and not rust proofing it. If I'm going to own a car from new I'd really like it to be rust sprayed from day one.

At almost 60,000km the stock tires are running somewhat low on tread, front brake pads are low-ish, A/C needs to be looked at (common issue apparently, VW has fixed it twice, works fine just not super cold), needs the DSG service soon, etc. I've already paid into the VW Protection Plan ($1000), so imo it doesn't make sense to keep it when I can give it back to the dealer to deal with all those things.

VanillaDonut wrote: Given you put down a large downpayment on a lease, you should probably keep the car particularly when the size and driving are to your taste.

Now saying that, if you prefer the next-gen Golf GTI or R then go for it. I know people who just like the latest and greatest. Given the current climate, you definitely can get a good trade-in value for your car from the dealer. Plus, your total km driven is lower than what you paid for so you may get something back that can go to your next VW purchase as well. Plus Plus, they may be willing to waive the remaining left of your lease but all depends on what you can get from your dealer. I think you definitely should explore this route before making a final decision to buyout or get a new one.
Thank for feedback. I'll talk to my dealer. I don't particularly love the look of the new generation GTI/R, but interested in the options and power increase. It is tempting because the new gens are actually priced slightly lower than current gens if you don't want the bells and whistles.

Any idea how a trade-in works if I take my VW to, say, Honda? Will Honda just buy the car our from VW? How does that all work?
Deal Fanatic
Mar 21, 2010
6591 posts
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Toronto
Stangn99 wrote: Mostly because of maintenance costs and not rust proofing it. If I'm going to own a car from new I'd really like it to be rust sprayed from day one.

At almost 60,000km the stock tires are running somewhat low on tread, front brake pads are low-ish, A/C needs to be looked at (common issue apparently, VW has fixed it twice, works fine just not super cold), needs the DSG service soon, etc. I've already paid into the VW Protection Plan ($1000), so imo it doesn't make sense to keep it when I can give it back to the dealer to deal with all those things.
I guess if your plan is to lease again and never have to deal with these things, that makes sense. To me, rust proofing isn't a big deal. I haven't done it (to my GTI) and I intend to keep it for years. I think there are a lot of people who don't think it's worthwhile to rustproof modern cars unless they are known to have rust issues.
Deal Addict
Oct 3, 2017
1194 posts
1082 upvotes
Buying it outright and spending some $$ on tires and brakes would make the most sense to me. The AC is under warranty so bring it back to dealer.
New good quality tires and brakes (I prefer OEM pads) will make your car feel a lot better than it does now. OEM tires are usually inferior to quality tires like Michelin Pilot Sport A/S 4. A wheel alignment and replacing your brake fluid are good things to do as well.

Even with spending on wear and tear maintenance items you will still be miles ahead financially than replacing with a new vehicle leased or not.
Member
Nov 10, 2015
379 posts
392 upvotes
Thornhill, ON
Your advisor told you to put down $10k on a lease? Time to look for a new advisor...
Deal Guru
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Jul 12, 2003
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kammj1 wrote: Your advisor told you to put down $10k on a lease? Time to look for a new advisor...
Probably they are buying a house and lower monthly payment on a car helps to evaluate their buying power.

That's the only reason I can think of and hope this is true, otherwise it shock me someone with knowledge suggesting others to put a downpayment for a lease.
Retired Forum Moderator February 2009 - June 2015
Deal Guru
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Jul 12, 2003
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OP, you have to do the homework and get some solid data to see which option of the 3 is the best.

1. How much are those 2018 GTI with simialr mialge of yours are selling, compare to your residual + tax, can you make any profit from it?

2. How much TIV dealer is giving you, this is critical to tell if the option works or forgettable.

3. If the car worth more in the used car market, why don't you sell it yourself? Dealer will sure offer something less than market value if they want to buy it. Why giving out the profit to others if you can profit it all on your own. Unless you absolutely against selling private on your own.

Keep us updated.
Retired Forum Moderator February 2009 - June 2015
Member
Feb 14, 2004
235 posts
43 upvotes
Delta, BC
Low mileage used cars are in demand. Your VW dealership should be able to give you a good trade in value (probably $2k to $5k), however there is also a low inventory of new cars (and low delays when ordering from factory). This might be your real challenge.
Deal Guru
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Apr 24, 2006
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MP3_SKY wrote: Probably they are buying a house and lower monthly payment on a car helps to evaluate their buying power.

That's the only reason I can think of and hope this is true, otherwise it shock me someone with knowledge suggesting others to put a downpayment for a lease.
But wouldn't putting the 10k more into he downpayment of the house essentially offset it since the amount borrowed would be less?
Deal Fanatic
Mar 21, 2010
6591 posts
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Tijuana wrote: But wouldn't putting the 10k more into he downpayment of the house essentially offset it since the amount borrowed would be less?
Not entirely because it doesn't account for the leverage aspect and a mortgage payment calculated over decades versus a car payment where the bulk of the vehicle's value has to be paid over a few years. My brain isn't working well enough to talk about the theory so I'll give a personal example. I bought a roughly $40,000 car financed with payments of approximately $650/month (5 years). If I paid that loan off, i.e., I gave up $40,000 and no longer had to pay $650/month, I would be able to borrow way more than an extra $40,000 on a mortgage. $650/month as a mortgage payment would buy you a lot more than $40,000 worth of house.
Deal Expert
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Jul 5, 2004
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kammj1 wrote: Your advisor told you to put down $10k on a lease? Time to look for a new advisor...
Sounds like it might have been from the underwriter. They likely wanted his debt and all monthly payments under a certain level in order to approve the mortgage.
Sr. Member
Oct 24, 2009
998 posts
1033 upvotes
Vancouver
Stangn99 wrote: Hey all,

Our lease is coming to an end within 5-ish months and we're kind of torn on what to do. Here's our current situation:
  • Car is 2018 Golf GTI Autobahn with DSG automatic
  • 80,000 km allowance, currently has 59,000 km
  • Put down $10k to lower monthly payments so we could purchase the house we're in now (advice from our advisor)
  • Paid $1,000 for VW protection, which covers all damages up to $10,000 (we have a golden retriever)
  • Residual is $19,800
We're not interested in keep the car. Since we never planned to buy it out, we didn't both doing rust proofing.
I'm hearing differing opinions about what to do:
  1. Buy out the car from dealer and sell private because of demand for GTI
  2. Trade the car in for next car if not getting another VW
  3. Sell the car back to the dealer as it's apparently worth more now???
Wife and I would love to get another GTI or R, as we are happy with ride, reliability and looks of the car, but open to other makes/models as well. Ideally would like to lease again in the event the car is a lemon or we don't end up enjoying it.

Some other makes/models besides the GTI we were looking at include:
  • Kia Soul (Electric or gas)
  • Hyundai Ionic/Kona (electric OR gas)
  • Mazda 3
  • WRX
  • Any others we should look at?
The catch is that we're somewhat limited to the size (length) of the MK7 GTI, so that the car can fit in our parking pad.

Thanks for any suggestions/tips
I am in a similar position (with a few more months on lease) and ended up putting down a deposit on the new Golf R. The residual for R leases (at least right now) is artificially boosted so lease rates are quite attractive (low $600 all-in for me). After pricing out quite a few options, it's probably the best bang for the buck. It's only slightly more than the Mazda 3 Turbo and new GTI so I thought it was a no-brainer. Considered jumping to BMW/Mercedes/Audi but the same lease rate only gets you a moderately-optioned base engine version - and don't forget the R is faster than the go-fast versions of those (S3/A35 AMG).

Now there is one other option which is kind of a black sheep - the Lexus IS. You could get an IS300AWD in that price range (when there's a Lexus 3-day event) and it's not that fast but I had one before and it really is a joy to drive. It's an old school sports sedan, didn't get big like the 3-Series/A4, proper rear wheel drive architecture and a glorious sounding V6 that's bulletproof. Also it's a Lexus so it'll last a long time if you want to keep it. Now that being said, it is a pig on gas and quite impractical, it didn't grow like the 3-series so the interior is quite tight. But seeing as it's more of a "fun" car than commute car for you, might work. I really did enjoy it, the V6 howl when you gas it is glorious, it handles like a dream and the cockpit really gave me fighter pilot vibes as it kind of encloses the driver a bit.

Now onto the financial side of things, if you need to extend your lease to wait for the R, it can likely be done by VW (up to 6 months I think). Also, given the current used car shortage, my VW advisor said there would likely be positive equity left at the end of my lease so they could use that to help reduce the cost of the new car. Basically the dealer would buy it out from VW at the lease termination rate but as the actual value is higher than that, it would net a positive balance. Same idea if you brought it to a non-VW dealer, they would just buy the car from VW finance at that lease termination rate and would get some positive equity given how bad things are on the supply side right now. Of course, in either case, it's up to the dealer if they want to roll that into your next car. You would likely get more just buying it out and doing a private sale - if you wanted to be ultimate RFDer I suppose you could buy it out now and sell it before summer's over privately. Then take streetcar until your new car comes in or wait for a crazy RFD deal (which likely is not happening for a while)...
Deal Expert
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Mar 1, 2008
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As others have said, since you like the GTI, it's the perfect size, and the used car market is through the roof right now, I would buy out the car. $10k down payment is another huge reason to buy it out and keep it for another year or two. Plus as new homeowners, I would assume you want to pay off your mortgage as fast as possible? Plus when the MK8 GTI and Golf R lands, getting one will probably be difficult. The interior is also a huge step backwards compared to your MK7.5. Imo after doing the math, the choice for me is to either buy a base GTI or go straight to the Golf R. I'm a finance kind of guy though.

If you're looking for more power in your MK7.5, you can always get a tune now or when the powertrain warranty runs out. I would personally recommend Unitronic or Integrated Engineering. I have the IE tune on my 2018 with 52k km and the car is so responsive. Though I find their DSG tune is a bit aggressive in daily driving for my liking. It holds gears for too long and Eco mode just lugs the engine around. My car has developed some squeaks but I track my car so that is to be expected. Everything else is holding up well and I didn't rust proof either. I personally don't believe in rust proofing. I don't recall my dad rust proofing the BMW E39 or Volvo 850 and S70 and they didn't rust. Though those cars are of a different class.

Btw I don't think many other cars in your list would fit in your parking spot. Though I am surprised why your parking spot is so small. Most cars nowadays aren't as compact as the Golf. Even the 10th gen Honda Civic hatch is over a feet longer than the Golf.
RFD is love. RFD is life.
Deal Guru
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Mar 13, 2004
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Looking on Autotrader the lowest price I see for a similar car (year/kms) is starting at almost $29k - https://www.autotrader.ca/cars/volkswag ... ncedSearch

So unless the dealer plans on giving you something really close to that price you are far better selling privately IF you decide to sell.

The Golf R is a great car and I'm sure you would like it even more then your GTI, being AWD you would love it in the winter BUT if you guys don't drive to much then not sure if its worth it for you or not but is something you should look into for sure.
Deal Addict
Jan 8, 2007
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sickcars wrote: Looking on Autotrader the lowest price I see for a similar car (year/kms) is starting at almost $29k - https://www.autotrader.ca/cars/volkswag ... ncedSearch

So unless the dealer plans on giving you something really close to that price you are far better selling privately IF you decide to sell.
Dealer offer will likely be 21-23k range on trade in which is about right if they plan to post it for 30k and then sell somewhere in the high 20 range.
[OP]
Jr. Member
Nov 6, 2006
177 posts
68 upvotes
MP3_SKY wrote: Probably they are buying a house and lower monthly payment on a car helps to evaluate their buying power.

That's the only reason I can think of and hope this is true, otherwise it shock me someone with knowledge suggesting others to put a downpayment for a lease.
That's exactly the reason why she suggested a dp. We also had our hearts set on the GTI.

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